advice on starting new debt settl. biz

I would first have to ask what is your objective in opening a debt settlement business? Is is profit driven? Or, do you have more altruistic goals? Are you considering this as a part time supplement, or a full time business model?

I would note that the nature of this business is risky; your primary customers will be cash starved, so setting up your business model to confront that is paramount (if profit is your primary goal).

Second, understand that the industry overall has a questionable reputation, and there are several scamming operators out there. You will have to position your business in a highly disciplined manner.

On the plus side, the start up costs, (barriers to entry) are low. You could work out of your home, and do this as a part time endeavor to start. Also, your credentials as an economics prof would be a plus.

Judging on your profession, you may want to consider debt counseling, the new bankruptcy laws are requiring filers to go through counseling. Perhaps this is more of what you had in mind.

To truly advise, a bit more information on the mission, scope and objectives is needed.

 

As Biz aptly noted, this business model is highly scrutinized. Be prepared for many, many questions and run your operations by the letter of the law. I don't know for certain but, I would assume federal and state regulations are quite stringent just as those are which govern CSO's.

 

I can understand your objectives, perhaps to aid in defining them, there are four or five main categories/industries related here:

1) Debt negotiation and mediation (settlement),

2) Debt counseling (a prerequisite to negotiation and settlement in my mind),

3) Credit repair and management,

4) Personal financial management/planning,

5) Legal items (BK, taxes, liens, judgements, etc.)

These are all related, and often consequential to each other. As a (second) career you may want to examine the broad categories and determine where you would feel your skills and expereine are most applicable.

In my opinion the market seems to need the education of the "basics" of personal finance. As you are probably well aware, your students can probably apply Keynsian, or supply side theory to the economy, but do not know how to read a credit report or understand a credit card agreement.

I suggest thinking about all the areas, how they relate and where you may be the most effective. Perhaps teaching finance fundamentals with ancilliary services of debt/credit counseling and negotiation.

 

No, true garnishment can only be ordered by a court, or by an employer in some cases.

If you referring to the client turning over all of their income for disbursement, automatic payment may be an option, or direct deposit to an escrow type account for payment.

 

Exactly, hence my suggestion that perhaps debt counseling is more suited to your objectives and desires. You do have to correct the root cause of the problem(s), that is the true mission.